Tax Expenditures

CBPP: Tax Expenditures Are Ripe for the Picking

Tax expenditures have been a hot topic lately as a way to raise additional revenue for a deficit reduction plan that could replace sequestration. Recently, Sen. John McCain (R-AZ) said he would be willing to consider several "revenue closers" (or tax expenditures) in a compromise, and reforming tax expenditures has been proposed by the White House as well.

Tax Expenditures For Higher Education Rival Spending on Pell Grants

One of the lesser known provisions of the American Taxpayer Relief Act is the extension of the refundable American Opportunity Tax Credit (AOTC) through 2017. The AOTC was created in the 2009 stimulus to replace the non-refundable Hope Credit, and provides a tax credit equal to spending on tuition, up to $2,500.

A Closer Look at Refundable Tax Credits

Yesterday, CBO issued a report on refundable tax credits, examining many issues involved with the credits. The first refundable credit, the Earned Income Tax Credit, was created in 1975 to offset the payroll tax for low-income people. The number of refundable credits has increased to a high of 11 different credits in 2010, and 5 currently. The cost of these tax expenditures has also risen, reaching a high of $238 billion (in 2013 dollars) in 2008 due to many economic stimulus measures before falling to $150 billion this year.

IRS Taxpayer Advocate Report Shows the Need for Tax Reform

The complexity of our tax code has many advocates making the case for tax reform as we head toward the second round of fiscal negotiations.

CBO's "Options for Taxing Multinational Corporations"

Yesterday, CBO put out a new report on the system for taxing U.S. multinational corporations, a somewhat complex but important topic when it comes to corporate tax reform. The report both describes the current system and its shortcomings, while presenting options for reform.

In short, our current international tax system works as follows:

Coburn Takes a Look at Tax Expenditures

Senator Tom Coburn (R-OK) has released a new list of ten wasteful tax expenditures, totaling $130 billion over the next ten years. Whether it is tax breaks for NASCAR tracks, fishing tackle boxes, or films produced in the U.S., the list serves as a clear sign that there are plenty of places to look to raise revenue from tax expenditures. Coburn's list is below.

Steuerle: Revenue Proposals Not Enough

Urban Institute scholar and CRFB board member Gene Steuerle writes in his blog The Government We Deserve that the current revenue proposals from both sides simply aren't enough to make a substantial dent in the deficit.

"Fixing the Debt: Reforming the Tax Code and Federal Health Spending" Recap

Yesterday, the Fix the Debt Campaign had a event with two roundtables bringing together many health policy and tax experts from across the political spectrum to discuss two of the central issues involved in the current budget negotiations.

Softening the Blow on the Charitable Deduction

In a new paper yesterday, we showed how policymakers could raise revenue exclusively from higher earners without increasing rates. Specifically, we showed three models which would phase in different types of tax expenditures caps on income above $200,000 ($250,000 for households) in a way that raised revenue similar to what would be generated by allowing the upper-income tax cuts to expire.

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